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Crisis casts new light on ANWR.

With more than one-third of the undiscovered oil and gas resources of the nation and half of its coal reserves, Alaska should figure prominently in a diversified national energy strategy designed to break the nation's dependence on Middle East oil. Regardless of the range of components in the emerging strategy, new oil and gas development in Alaska is likely to serve as a cornerstone of any plan designed to strengthen production and to reduce foreign oil imports. But if America is to come to grips with its energy problems, it must also return to the spirit of conservation and make a serious effort at utilizing alternative energy sources.

There's no simple solution that will satisfy America's energy needs into the 21st century, though; no magic carpet or practical, benign energy alternative exists. And conservation alone will not solve America's energy problems, because no amount of energy savings will eliminate the need for large amounts of fuel in the future.

Petroleum has been an important natural resource used by mankind throughout history. Oil and gas now account for two-thirds of America's energy consumption. That figure translates into heat for homes, energy for global travel and gasoline for automobiles. From heart valves and life jackets to guitar strings and crayons, petroleum-derived products are a major part of modern life. America's consumption has risen and its production has fallen. It is importing more than half of what it needs to continue fueling its economy.

It will take a combination of new oil and gas development, conservation and a greater utilization of alternative energy sources to enable America to significantly reduce its dependence on foreign oil. Alone, none of these practices can solve America's mounting energy storm.

The single most important action the United States can take to plan for its energy future would be for Congress to allow leasing on the Coastal Plain of the Arctic National Wildlife Refuge. Development of oil resources there probably would result in a bigger incremental increase in domestic oil production than could be obtained from any other action.

Geologists believe the Coastal Plain may yield more than 9 billion barrels of oil and may represent the best chance for a major domestic oil discovery. Other strong prospects in Alaska include the Chukchi Sea, where prospects may contain more than 4.8 billion barrels of oil, and the Beaufort Sea, where prospects may hold several more billion barrels of crude.

Despite this tremendous energy potential, the federal government has put little emphasis on new Alaska drilling, or for that matter, on new domestic production in the Lower 48 states. President George Bush's recent decision to suspend leasing on promising prospects off the coasts of California, Oregon, Washington, Florida and New England left a vast majority of the nation's energy-rich outer continental shelf off-limits to development.

Environmentalists applauded Bush's action, but they also want the federal government to ban drilling off Alaska's coast and in ANWR. Barry Williamson, director of the Minerals Management Service, warned that such action would increase the nation's dependence on foreign oil and make it more vulnerable to petroleum price increases and supply disruptions. Williamson explained the inherent risks will only grow larger as domestic production falls and new petroleum prospects on federal lands are withdrawn from exploration and development.

As more and more land has been closed to oil development, U.S. dependence on foreign oil has increased to record levels, and so has its bill for OPEC crude. According to the Department of Energy, the bill for imported oil surged to $49.62 billion last year, up $10.5 billion from 1988, and an even larger bill is expected this year. Oil imports accounted for 45 percent of the U.S. trade deficit in 1989.

Oil imports climbed to an all-time high in the first six months of 1990, accounting for 50 percent of the nation's petroleum consumption. Meanwhile, domestic production fell to its lowest level in decades. Output from the giant Prudhoe Bay field held up national production levels and significantly slowed the rise in oil imports. But Alaska's North Slope output, which accounts for one-fifth of all domestic production, peaked in 1988 and is now declining.

Despite upcoming boosts in production to be provided by new gas-handling facilities at Prudhoe Bay, longterm declines at the field will far outpace any short-term increases. Daily production at Prudhoe Bay is expected to be cut in half within 10 years. BP Exploration (Alaska) Inc. estimates that production will decline 10 to 12 percent a year through the end of the century.

Declining production and the Middle East conflict emphasize the need for a comprehensive national energy policy of which oil development in ANWR is a major component. Although new production from the refuge would not bring immediate relief to any supply disruptions resulting from current global conflicts, every new domestic barrel of oil produced not only represents a decrease in the amount of oil this nation has to import, but also serves to reduce the risks of future conflicts.

Environmental groups hotly oppose any drilling in ANWR, contending that no amount of oil is worth entering the refuge. Such groups view the issue as a choice between oil development and wildlife, indigenous people and the landscape.

But the oil industry, the North Slope Borough and the state of Alaska point out that with advancing Arctic technology, only a mere sliver of the Arctic refuge would be developed, and then only if oil were discovered. Advances in oil-field technology and design will allow for a smaller and more compact footprint' of energy operations in the refuge. Gravel pads containing twice as many wells and covering less than half of the acreage of those constructed in early Prudhoe Bay field development would be employed in ANWR.

According to the Congressional Office of Technology and Assessment, if several major oil fields were discovered in ANWR, energy operations would affect fewer than 7,000 acres, less than one-eighth of 1 percent of the 1.5-million-acre Coastal Plain. The Coastal Plain itself represents only 8 percent of the 19-million-acre refuge.

Some habitat would be changed by development, but by careful avoidance of critical habitat areas, federal agencies believe the Coastal Plain can be developed with little impact on the wildlife and environment. Caribou, birds and other wildlife continue to flourish side by side with oil-field operations at Prudhoe Bay.

Contrary to claims made by environmental groups that development would tear up "Alaska's last Arctic wilderness," no development would occur inside ANWR's designated wilderness areas. On the other hand, extending a wilderness designation to cover the entire Coastal Plain could deny the nation up to one-fourth of its future domestic oil production. It also would deny the United States the opportunity to cut oil imports by tens of billions of dollars annually.

Lost in the ANWR debate is the fact that Alaska already contains 56 million acres of designated wilderness, 62 percent of all federal wilderness in America. This immense wilderness block covers an area larger than the states of Pennsylvania, New Jersey, West Virginia and Maryland combined. None of it is being considered for oil leasing.

Proposals are in place to add more than 12 million acres of new federal wilderness across Alaska. This could leave the 49th state with more than two-thirds of all federally designated wilderness. Although the Coastal Plain of ANWR is not included in the federal proposal, environmentalists have launched a full-scale effort to convince Congress to declare it wilderness.

Congress is likely to consider the ANWR issue over the next several months. It needs to filter out the emotional misinformation, weigh the facts, understand the options and consider the implications for the future.
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Title Annotation:Iraq-Kuwait Crisis, 1990-; Arctic National Wildlife Refuge
Author:Portman, Carl
Publication:Alaska Business Monthly
Date:Dec 1, 1990
Words:1279
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